Chandigarh: Insurer penalised for failing to release fire loss claim

The District Consumer Disputes Redressal Commission-1 has directed United India Insurance Company Limited, Sector 17, to pay ₹5,68,060, along with ₹30,000 for mental harassment and ₹10,000 as litigation costs, to the proprietor of Raghuveer Furniture, Sector 54, which was gutted in a 2018 fire.

The proprietor Raghuveer Chand Goyal had submitted that his furniture shop was gutted in a fire on December 11, 2018, following which an FIR under Sections 436 (mischief by fire or explosive substance with intent to destroy house) of the Indian Penal Code was registered.

As his shop had a ₹6 lakh insurance cover, he reported the matter to the insurance company with the relevant documents, adding that the policy had been renewed to cover the period between May 26, 2018 and May 26, 2019.

However, even after completion of all formalities, the insurer failed to release the claim of the complainant.

The insurance company, in their written reply, admitted that the shop was insured with them but claimed that the complainant was required to provide certain proof of averments as set up in the consumer complaint.

They added that as the complainant did not supply the requisite documents, he was not entitled to claim or compensation, before claiming that the complainant was asked to furnish documents regarding ownership/rent deed of the premises, but the same could not be produced.

Goyal’s defence, however, argued that all documents were checked at the time of issuing the policy.

The commission, meanwhile, noted that the insurer’s failure to released the payment amounted to mental agony and harassment, adding that, the company was deficient in rendering services, making the complainant entitled for the insured amount, compensation and litigation expenses as prayed for.